A Growing Problem in Real Estate: Too Many Too Big Houses • Hacker News Board

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#221

Post by i_am_proteus » Thu, Jun 20, 2019, 6:24 PM UTC

treis wrote: post #179

LarryDarrell wrote: post #108

Earlier quoted context omitted.

The thing I've noticed is that in my area all the modest neighborhoods (2 bed, 1 bath, sub $200k) are being bought up by landlords. This leads to a neighborhood of renters, which is a lot different than a neighborhood of owners. The Havers can buy a lot more houses than the Have-Nots and I'm left wondering what the price of single family homes would be if renting them was illegal and they were all placed on the marke…

It's another example of the high cost of being poor. The rent on my town home is several thousand more per year than what a mortgage (5% down), taxes, HOA fee, PMI, and home insurance would be.

Several thousand more per year doesn't sound too far off: if you own, you're responsible for home repairs: roof, HVAC, electrical, plumbing, appliances, siding, painting, etc.

I budget $2,000 a year for repairs on a modest-sized home; most years it's under $1,000, but HVAC and roof are infrequent and fairly expensive.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#222

Post by radcon » Thu, Jun 20, 2019, 6:25 PM UTC

cblum wrote: post #208

maxsilver wrote: post #98

Earlier quoted context omitted.

I also hate maintaining a detached single family home with a yard. I also hate being responsible for the fixes. But that situation is still far better than renting. When we rented, we were subjected to eviction at any time, for nearly any reason, for basically no notice (60 days, which in the US is effectively zero notice). Your subjected to every whim the crazy wildly-irrational housing market throws at you (we've h…

>housing security There is no such thing unless your home is paid off. If you have a mortgage and are hit by a catastrophic life event that leaves you without a job and depleted of your emergency fund, your home is gone.

> If you have a mortgage and are hit by a catastrophic life event that leaves you without a job and depleted of your emergency fund, your home is gone.

That risk exists regardless of whether you rent or own.

The risks he mentioned are unique to rentals. It's very common for leases to essentially say "We can kick you out if we feel like it," no justification necessary. Even if the lease stipulates some justification, they'll find a way around it ("Our maintenance crew noted your excessive noise on 37 separate occasions. You also have a wreath hanging on your door, which is another violation of the lease.").

It's extremely rare for a mortgage to contain any sort of terms that allow you to be arbitrarily kicked out of your home.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#223

Post by scarface74 » Thu, Jun 20, 2019, 6:25 PM UTC

cblum wrote: post #202

hn_throwaway_99 wrote: post #93

One of the trends that I can only hope continues is getting rid of this idea that home ownership (especially single family home ownership) is the American dream. I live in and own a detached single family home (was a compromise with my spouse) and to be honest, I hate it. I hate having to take care of the yard, to deal with unreliable tradespeople when things break, to deal with the huge expense of minor home repairs…

Glad to see this near the top and glad to know I’m not the only one who thinks like this. Like you, I only own a place as a compromise with my wife. And like you, I hate everything that comes with homeownership. People don’t realize there are a lot of hidden costs in owning a home. When you rent, if you secure a 12 month lease, you know exactly how much you’re spending in housing over the next year. When you own, all…

When you rent, if you secure a 12 month lease, you know exactly how much you’re spending in housing over the next year.

But you don’t know what you are going to be paying in year 2,3,4,5 etc.

Our rent went up from $1300 in 2012 to $1700 in 2016. It’s now $1900/month.

Besides that, I don’t have people making noise all around me and everyone had the apartment mandated Comcast bundle including the wireless router where we had 10-15 wireless signals interfering with ours.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#224

Post by rifung » Thu, Jun 20, 2019, 6:25 PM UTC

newsoul2019 wrote: post #139

hn_throwaway_99 wrote: post #93

One of the trends that I can only hope continues is getting rid of this idea that home ownership (especially single family home ownership) is the American dream. I live in and own a detached single family home (was a compromise with my spouse) and to be honest, I hate it. I hate having to take care of the yard, to deal with unreliable tradespeople when things break, to deal with the huge expense of minor home repairs…

Am I the only one who has always seen renting as a temporary arrangement only? If you don't own something, somewhere, doesn't that mean the same as being homeless? Not trying to offend anyone. Genuinely wondering, are there people who really don't want to own real estate ever in their lives?

I do see renting as a temporary arrangement only in the sense that at any point it's possible I will be forced to move out.

However, after doing the math I think I will rent for my entire life since it makes much more sense financially (much to my surprise)

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#225

Post by scarface74 » Thu, Jun 20, 2019, 6:25 PM UTC

cblum wrote: post #210

Wowfunhappy wrote: post #205

Earlier quoted context omitted.

> When you rent, if you secure a 12 month lease, you know exactly how much you’re spending in housing over the next year. Only for exactly 12 months though. After that, your rent could double for all you know, and there’d be nothing you could do. You can move, of course, but now you’ve been forced to upend your life. I live in a rent stablized apartment, and I feel lucky not just because my current price is lower tha…

True, but from my perspective moving is a small, point in time hassle that you go through every couple years as a renter, as opposed to a lifelong stream of issues that you have to deal with as a homeowner.

If the rent is going up where you live, it’s probably going up everywhere else you would want to live in lockstep.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#226

Post by larrywright » Thu, Jun 20, 2019, 6:28 PM UTC

baron_harkonnen wrote: post #172

hn_throwaway_99 wrote: post #93

One of the trends that I can only hope continues is getting rid of this idea that home ownership (especially single family home ownership) is the American dream. I live in and own a detached single family home (was a compromise with my spouse) and to be honest, I hate it. I hate having to take care of the yard, to deal with unreliable tradespeople when things break, to deal with the huge expense of minor home repairs…

I've gone the full cycle from renting -> own -> renting, and I can tell you that you're forgetting about a lot of the limitations that come with renting. There are a huge number of things that are out of your control and hobbies you simply can't have. Especially if you want to compare apartment to SFH. You can't paint the walls, keep a bicycle outside, grow plants you want, have any loud hobbies, BBQ, even keep your…

I came here to make this same comment - renting forever is probably fine for people who are willing to accept a certain kind of lifestyle, but for most people it's too limiting. Got kids and want a playset in the backyard? Not in an apartment. Want a wall where there isn't one, or remove a wall that you'd rather not have? Again, nope. Want a home theatre with a big subwoofer so you can watch movies at home (one of my favorites). Nope, not unless you want some angry neighbors.

I don't think for a minute that owning a home costs less month-to-month over renting - with maintenance and upkeep, repairs and new appliances periodically, it's probably a break-even at best. But, at the end of it in 20 or 30 years I can sell the house and have that money (to buy a smaller house, or move into something senior-citizen appropriate, or a condo or whatever). With renting, that's not the case.

It also helps that I live in the Midwest, where property prices are not insane. I just sold my first house (made almost $30k over what I paid 18 years ago), and now I'm buying a 5-bedroom, 3k sq ft house in a nice neighborhood... for $230k.

Is it for everyone? No. But there's no way I'd rent, at least not at this stage of life.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#227

Post by [deleted] » Thu, Jun 20, 2019, 6:29 PM UTC

hn_throwaway_99 wrote: post #93

One of the trends that I can only hope continues is getting rid of this idea that home ownership (especially single family home ownership) is the American dream. I live in and own a detached single family home (was a compromise with my spouse) and to be honest, I hate it. I hate having to take care of the yard, to deal with unreliable tradespeople when things break, to deal with the huge expense of minor home repairs…

[deleted]

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#228

Post by shiohime » Thu, Jun 20, 2019, 6:30 PM UTC

hn_throwaway_99 wrote: post #93

One of the trends that I can only hope continues is getting rid of this idea that home ownership (especially single family home ownership) is the American dream. I live in and own a detached single family home (was a compromise with my spouse) and to be honest, I hate it. I hate having to take care of the yard, to deal with unreliable tradespeople when things break, to deal with the huge expense of minor home repairs…

Having ownership and responsibility is nice imo. Pay off a house, and you have some nice real estate that you can live in, sell off, rent out, transfer to your children/grandchildren later in life. Way more options than having to pay for rent indefinitely. I've lived in way too many apartments in the past decade, purchasing a house and land has been the best decision of my life. There are tradeoffs to both lifestyles - I'd say that apartment / renting is great for 18 - 30 and gets progressively worse the older you get.

I'd rather have a dream where I have more responsibility and ownership as I progress in life rather than the dream of eternally renting and owning nothing. Sure I have to deal with shit I used to just call up my landlord and have them deal with it, but learning new skills and how to fix random things is fun too, at least to me. Not everyone's cup of tea I get it, but neither is renting forever.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#229

Post by larrywright » Thu, Jun 20, 2019, 6:33 PM UTC

scarface74 wrote: post #117

hn_throwaway_99 wrote: post #93

One of the trends that I can only hope continues is getting rid of this idea that home ownership (especially single family home ownership) is the American dream. I live in and own a detached single family home (was a compromise with my spouse) and to be honest, I hate it. I hate having to take care of the yard, to deal with unreliable tradespeople when things break, to deal with the huge expense of minor home repairs…

Those two complaints are easy to fix. Get a yard service - I pay $150 a month for them to come twice a month. Get a home warranty - it’s about $600 a year and they fix everything - appliances, hot water heaters, plumbing, etc. I haven’t purchased one for current home because it’s a new build, but I did for furnished rental property I previously owned. In the grand scheme of things for an owner occupied home it’s prob…

Just bought a new house and requested the seller pay for a home warranty for the first year. I may look to keep it after that. It doesn't take much in home repairs to justify $600/year, provided that the work is done well and on time.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#230

Post by djakjxnanjak » Thu, Jun 20, 2019, 6:34 PM UTC

thorwasdfasdf wrote: post #203

hn_throwaway_99 wrote: post #93

One of the trends that I can only hope continues is getting rid of this idea that home ownership (especially single family home ownership) is the American dream. I live in and own a detached single family home (was a compromise with my spouse) and to be honest, I hate it. I hate having to take care of the yard, to deal with unreliable tradespeople when things break, to deal with the huge expense of minor home repairs…

One way to think about it is the Spread between the cost of owning vs the cost of renting. For example, in SF, the spread is very small and hence favors the renter. Here's an example: In SF, your cost of ownership is roughly 2% per year (1.4% property taxes, 0.5% for Earthquake Insurance, 0.3% for repairs and depreciation and HOA), which comes to a total of 2.2%. The average Rent for an equivalent house is roughly 3%…

My earthquake insurance is more like 0.1% and I'm pretty sure the rates are set by the state - where are you getting your numbers?

If the cost were 0.5% I don't think it would be worth paying, that would buy a lot of seismic reinforcement.